Here’s How Costco’s New Grocery Delivery Service Works

Costco is rolling out a new delivery service to bring fresh and dry groceries to your door, at a time when the likes of Walmart and Kroger are also investing heavily in their online business. The retailer announced the initiative Thursday and outlined the two different options.

Those wishing to order nonperishable items like cookies, cereal, and canned goods, would choose the two-day delivery option. Orders of $75 or more have no charge for delivery. This option became available this week.

The second option is same-day delivery, which brings groceries to your door in as little as an hour. All online grocery items can be ordered via this method, which is available at 376 of the retailer’s 514 locations. Costco plans to expand to more stores in the coming months. The same-day option is made available through a partnership with grocery delivery firm Instacart. There is a delivery fee for orders less than $35. Prices on the items will be 15-17% higher than the same items sold in stores.

The goods sold for same-delivery will be priced higher than the same items sold at Costco stores. Costco did not specify what the price difference would be.

The retailer wants to provide similar options to what’s being offered by other major grocery chains. “There are people that actually want to go touch their fresh foods and decide, pick it themselves,” Costco CFO Richard Galanti said Thursday. “There’s going to be an increasing percentage of online and online delivery and the question is, in brick and mortar … ‘How can you drive sales if you’re not offering as many alternatives?’”

A shopper pushes a cart through the aisles of a Costco store April 4, 2008 in Tucson, Ariz. | Chris Hondros/Getty Images

The new grocery delivery service was announced during Costco’s post-results call Thursday. The big box retailer also announced sales had grown 16%, to $41.4 billion, in the most recent quarter. This was up from $35.7 billion a year earlier.